Purpose of this blog. ‘To be a national Advocacy voice, statistical Research reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America’

I.

That ‘Fourth Tough Question’ Refuses to Go Away!

Surely you remember, the ‘fourth tough question’ posed two weeks ago in Blog Posting # 255 at this website:

“Does the HUD – Code manufactured housing industry Really Want to See the
Return of ‘easy access to chattel capital’, stimulating new home shipment volume and filing vacant rental homesites in LLLCommunities, of all sizes, throughout the U.S.? – OR – has the nearly Five Year Shipment Nadir (i.e. ‘Lowest point’ in MHIndustry shipments history!’) become the accepted and manageable status quo benchmark in the minds and operations of one or more regulatory compliant lenders who’ve cornered the severely constricted manufactured housing loan origination market?’

Think about this matter carefully. Therein might lay the very crux of what put us where we wound up five years ago; where we are indeed today; and if we don’t break the vicious nadir cycle, where we’ll continue to be five years from now!

Within last week’s Blog Posting # 256, two MHIndustry veterans, each a successful entrepreneur businessman in his own right, responded with ‘heady & timely commentary’; one from the land lease lifestyle community perspective – 1) expressing dismay at independent, third party loan originator ‘cherry picking’ (i.e. via FICA scores) of manufactured home purchasers; 2) frustration with recent attempts by HUD – Code home manufacturers to roll out cooperative plans for selling/financing new home sales on – site, but with interest rates ranging from 12 – 20 percent; and now, 3) product price increases! And the other commentator boldly told us ‘easy access to chattel capital’ simply isn’t going to happen – EVER, and cited reasoned logic, couched on past bad performance of manufactured housing – secured chattel loans, as to The Why!

Well, this week, since Blog Posting # 256 appeared on 28 July, new additional ‘heady & timely commentary’, on that same ‘fourth tough question’ has arrived. The first is a mantra of sorts, being “Manufactured housing is fast becoming a cash business!” Reminds one of similar telling shibboleths of the past, e.g.

• During 1998, when we shipped 372,843 new HUD – Code homes, the commonplace pitch was: “We have no $ down, no job, no problem deals for you!’ Yep; that’s what we said back then to our prospective home buying customers.

• During 2002, when shipment levels plunged to their worst level since 1963, we frequently heard: “Be a stud, sell a HUD!” And 12 months later, we ballyhooed the “Year of the hudular!” –albeit a short lived production fad that went nowhere.

• During 2006, the everyday question was: “When does hurricane season begin?”, reminiscent of the ‘Katrina Factor’ that goosed home shipments a year earlier.

• During 2007, as more and more LLLCommunity owners/operators sold and self – financed new homes on – site, we frequently heard the clarion call for a “Return to Our (manufactured housing’s) Affordable Housing Roots!” – a plea that fell on deaf ears until 2008 & 2009, when National State of the Asset Class caucuses were held in Tampa, FL., & Elkhart, IN. (The NSAC has since been relabeled the MHInitiative®. Watch for announcement of a third national strategic planning caucus; planned, promoted and hosted by MHInitiative®, unless MHI or MHARR ‘steps up to the industry leadership plate’ beforehand, to lead us out of our self – generated & perpetuated new home shipment malaise (‘uneasiness & discomfort’) and morass (‘a marsh, a bog’ – as in ‘bogged down’).

• During 2010, at a heavily attended Manufactured Housing Finance Roundtable in Elkhart, IN., federal government regulators and GSE representatives made it absolutely clear: “Manufactured housing is on its’ own!” – and frankly, they were not only right but prescient, as nothing has changed since then – 3 ½ years later!!!

All of which brings us back to this new shibboleth” “Manufactured housing is fast becoming a cash business!” How do YOU see this scary prognostication? TRUE or FALSE? As they say, inquiring minds would like to know! Via email: gfa7156@aol.com or the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Then there’re these convicting remarks from yet another manufactured housing business executive:

“I’m with SR (commentator quoted in last week’s blog), who notes there ain’t no such thing as a free lunch! The MH industry has fouled its’ nest, and it’s not alone. So has the whole housing industry – the government, the entire nation. Collectively, we’ve bought far more than we can pay for, and now we’re paying for it. And we will be for some time. Nobody owes us nuthin. We owe everybody. There’s plenty of money available, sloshing around, just looking for good secure returns. That money will find its’ way to our (housing) product when we offer good housing that people of ordinary means can afford! By that, I don’t mean housing they can buy, if prepared to stretch to more than 30 percent of their annual household income.” BV (lightly edited. GFA)

If you’d like to read more on this heady and timely subject, i.e. What ‘affordable housing’ is, and how to measure it in terms of 1) the Annual Median Income (‘AMI’) of local housing markets, 2) Annual Gross Income (‘AGI’) of prospective home buying individuals and households, 3) the 30% Housing Expense Factor or HEF (One of six recognized measures of affordable housing), and 4) how ‘50% of AMI’ has become our nation’s ‘affordability benchmark’, make it a point to read and study the August 2013 issue of the Allen Letter professional journal.

The lead feature is titled ‘Contemporary Archetype of Truly Affordable Housing in the U.S.!’. It walks the reader through the multistep process of estimating ‘affordable’ & ‘risky’, new & resale home transactions, within & outside land lease lifestyle communities – and in the end, makes a compelling case for HUD – Code manufactured housing and its’ real estate segment lifestyle, as indeed being, ‘the contemporary archetype of truly affordable housing in the U.S.’! To subscribe, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Only $134.95/year for 12 monthly issues. (During the 23 years I’ve been writing and editing the Allen Letter professional journal, this is the most important and challenging housing – related article I’ve penned to date! GFA)

***

II.

Upcoming Opportunities You Don’t Want to Miss!

Last week we listed 11 MH, RV, RE & PM – related trade, educational, networking, and deal – making events YOU should be aware of this Fall; and deciding now, which ones to support with your participation. Well, since then, we’ve learned of more events to add to the list, increasing the total to 16 – all occurring between 5 August and 5 November, a scant three month period of time! Venues containing (*) are the ones I plan to patronize, and ‘Hope to see you there!’

5 August @ RV/MH Hall of Fame Induction Banquet (*) in Elkhart, IN. (574) 293-2344. Craig Bollman & Theresa Desfosses among ten inducted in this Class of 2013. Be sure to look at the new Fairmont HUD – Code home installed in front of the RV/MH facility, right along Interstate – 80. That means an average of 55,000 auto drive – bys per day, or more than 20 million people, viewing an attractive new example of our type factory – built housing, during the course of the next 12 months!

8 August @ four Webinars (*) having to do with New Advertising Rules as they apply to LLLCommunity owners/operators selling and financing new and resale home transactions on – site. For times and details, contact Donna Rishel via (217) 971-3968.

8 – 10 October @ 3rd annual SECO Symposium in Forsythe, GA. (865) 385-9675. This is the only regional event planned & hosted entirely by LLLCommunity owners/operators, with an emphasis on seller – financing of homes, and with several homes on display! For information, contact Spencer Roane, MHM®

10 & 11 October ! MHC of Arizona meeting (*) in Tucson, AZ. (480) 345-4202. Very special program being planned for LLLCommunity owners/operators, by Susan Brenton.

5 – 8 November @ Urban Land Institute’s Fall Meeting (*) in Chicago, IL. Manufactured Housing Communities Council or MHCC, to meet during the same time frame. Randy Rowe of Green Courte Partners is co – host of ULI’s meeting. Sam Zell is a guest speaker